I run a large small business, by which I mean that it seems to require a tremendous amount of work for the money it makes. My company runs parks and campgrounds under concession contracts with public recreation authorities, and I am currently spending a lot of time helping various parks organizations keeps parks open in a world of declining budgets.
I have been an entrepreneur in Phoenix, Arizona for ten years, before which I worked from other people in companies as large as Exxon and as small as 3-person Internet startups. I have an MBA from the Harvard Business School and a mechanical engineering degree from Princeton University.
I was a relatively early entrant into the blogging world, writing a libertarian blog called Coyote Blog. I also blog at Climate-Skeptic.com on global warming and climate change issues and at ParkPrivatization.com on trends in recreation privatization. I have written a novel called "BMOC" and several books and videos on climate change.

11/24/2010 @ 1:29PM27,462 views

The EPA's Electric Vehicle Mileage Fraud

Update: I wanted to provide a brief summary of what you will find below. In short, the government wants an equivilent MPG standard for electric cars that goes back to the power plant to estimate that amount of fossil fuels must be burned to create the electricity that fills the batteries of an electric car. The EPA’s methodology is flawed because it assumes perfect conversion of the potential energy in fossil fuels to electricity, an assumption that violates the second law of thermodynamics. The Department of Energy has a better methodology that computes electric vehicle equivalent mileage based on real world power plant efficiencies and fuel mixes, while also taking into account energy used for refining gasoline for traditional cars. Using this better DOE methodology, we get MPGe’s for electric cars that are barely 1/3 of the EPA figures.

In a parking lot near Detroit, General Motors is accumulating Chevy Volts. They cannot yet be sold to the public because the Environmental Protection Agency (EPA) has not yet delivered the required mileage sticker for the window. We can, though, get a preview of how the EPA may complete this admittedly tricky task from the mileage numbers they recently assigned to the all-electric Nissan Leaf. The Leaf’s numbers make it clear that this Administration is willing to resort to accounting fraud to promote its automotive agenda.

The traditional metric for automobile efficiency is miles per gallon (MPG) of gasoline used. But what does MPG even mean for a vehicle that doesn’t burn liquid fuel? Most of us would agree that the Leaf certainly does use fuel — after all, something must create the electricity, and in the US that is generally some sort of fossil fuel. So theoretically we should be able to create an MPG equivalent, or MPGe for short, to measure the fossil fuel use of electric vehicles.

For more than a decade, within the EPA and the Department of Energy (DOE), a number of different approaches to this problem have been discussed. With the release of the numbers for the Nissan Leaf, we now know what approach the EPA is taking, and results are depressing for those of us who would like to see transparency and adherence to science in the Administration. This Administration has a huge intellectual investment in electric vehicles and financial investment in the Chevy Volt. Like a shady company trying to pump up their stock by choosing a series of highly questionable accounting conventions, the EPA has chosen an approach that grossly overestimates the MPGe of electric vehicles.

The Nissan Leaf was rated at 99 MPGe. To reach this number, the EPA created a conversion factor between a quantity of electric energy, measured in kilowatt-hours (KwH) and a volume of gasoline, measured in gallons. They did this be dividing the potential energy or heating value of a gallon of gasoline (115,000 BTUs) by the energy in a KwH of electricity (3412 BTUs) to get a conversion factor of 33.7 gallons per KwH. Using this factor, they can convert miles per KwH of electricity in an electric vehicle to an MPGe that is supposedly comparable to more traditional vehicles.

The problem is that, using this methodology, the EPA is comparing apples to oranges. The single biggest energy loss in fossil fuel combustion is the step when we try to capture useful mechanical work (ie spinning a driveshaft in a car or a generator in a power plant) from the heat of the fuel’s combustion. Even the most efficient processes tend to capture only half of the potential energy of the fuel. There can be other losses in the conversion and distribution chain, but this is by far the largest.

The EPA is therefore giving the electric vehicle a huge break. When we measure mpg on a traditional car, the efficiency takes a big hit due to the conversion efficiencies and heat losses in combustion. The same thing happens when we generate electricity, but the electric car in this measurement is not being saddled with these losses, even though we know they still occur in the system.

Lets consider an analogy. We want to measure how efficiently two different workers can install a refrigerator in a customer’s apartment. In both cases the customer lives in a fourth floor walkup. The first installer finds the refrigerator has been left on the street. He has to spend much of his time struggling to haul the appliance up four flights of stairs. After that, relatively speaking, the installation is a breeze. The second installer finds his refrigerator has thoughtfully been delivered right to the customer’s door on the fourth floor. He quickly brings the unit inside and completes the installation.

So who is a better installer? If one only looks at the installer’s time, the second person looks orders of magnitude better. But we know that he is only faster because he offloaded much of the work on the delivery guys. If we were to look at the total time of the delivery person plus the installer, we’d probably find they were much closer in their productivity. The same is true of the mileage standards — by the EPA’s metric, the electric vehicle looks much better than the traditional vehicle, but that is only because someone else at the power plant had to do the really hard bit of work that the traditional auto must do itself. Having electricity rather than gasoline in the tank is the equivalent of starting with the refrigerator at the top rather than the bottom of the stairs.

An apples to apples comparison, then, would compare the traditional car’s MPG with the Leaf’s miles per gallon of gasoline (or gasoline equivalent) that would have to be burned to generate the electricity it uses. Incredibly, the DOE actually established and published such a standard in a rules-making process way back in Clinton Administration. The standard, called “well to wheels,” adds a couple new factors to the MPGe calculation we discussed above.

First, the DOE looked at the electrical generation efficiency, and determined that only 32.8% of the potential energy in the fossil fuel becomes electric energy in the average US power plant, which it further reduced to 30.3% to account for transmission losses. However, they realized it was unfair to charge electric vehicles for these losses without also charging gasoline-powered vehicles for the energy cost of refining and gasoline distribution. They calculated these as adding 20% to the energy it takes to run a gas-powered car, but rather than reducing existing MPG standards by this amount, they instead gave a credit back to electric vehicles. The 30.3% electric production and distribution factor was increased to a final adjustment factor of 36.5%. This means that the conversion factor discussed above of 33.7 gallons/KwH must be multiplied by 36.5% to get a true apples to apples MPGe figure.

The end result is startling. Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z.

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[...] Is the EPA Setting Us Up? May 7th, 2011 admin Leave a comment Go to comments The EPA is currently working out the EPA standards on electric and plug-in electric vehicles and there’s been quite a lot of debate on how, why, who, what, etc… But this is the first time I’ve seen the values being labeled as outright fraudulence: Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z. (Source: Forbes blog) [...]

[...] Is the EPA Setting Us Up? The EPA is currently working out the EPA standards on electric and plug-in electric vehicles and there's been quite a lot of debate on how, why, who, what, etc… But this is the first time I've seen the values being labeled as outright fraudulence: Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z. (Source: Forbes blog) [...]

“in the Midwest, the Leaf will basically be coal powered, and studies have shown it to create potentially more CO2 in these areas than a car burning gasoline”

The break even point would be approx 26mpg for a gasoline vehicle. Above 26 the EV would release more CO2, less than 26 and the car would release more. For 100% coal, which is the highest CO2 producer of practical fossil fuels for electrical production. Of course when coal is being used in exchange for cleaner sources, it’s easier to manage CO2 emissions, nationally. Decreasing CO2 emissions for an electrical plant by 10% means those who drive EVs in that locale now decreases their CO2 footprint by that amount. The bulk of CO2 production of gasoline is in the combustion, not refining. So it’s better to advocate using EVs when it’s economical and practical for the consumer.

[...] The EPA is currently working out the EPA standards on electric and plug-in electric vehicles and there’s been quite a lot of debate on how, why, who, what, etc… But this is the first time I’ve seen the values being labeled as outright fraudulence: Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z. (Source: Forbes blog) [...]

Mr. Meyer is wrong. Only 44% of American power comes from fossil fuels. The night time use of power to charge vehicles is surplus power, so the vehicles add zero new CO2 and zero load on the grid. The use of this energy is paid for, which is a windfall for the utility providers. The $0.06/kW-h it takes to charge the batteries is about one tenth the cost to drive a gas-powered vehicle. Forget about the greenhouse gases as a motivator. The driver gets to put about $4,000 a year back in their pockets. Plus the maintenance costs are a fraction that of gas-powered vehicles. the VMC Everest utlizes a built-in solar panel to assist the batteries. Some customers don’t plug in for months at a time.

If you’re going to be a press agent for the oil companies, you might as well admit it to your readers.

Excellent article; an important argument, straight and to the point. Thank you.

But still, even the “wells to wheels” standard leaves me underwhelmed. Wouldn’t it be easier to just let the market be entirely free (i.e. non-subsidized or price-fixed), and use price signals to show us which fuel is the most efficient, in that the most efficient will be the lowest-priced?

As the Austrian School of economics shows, prices are necessary for economic calculation: under socialism, thousands of economists and accountants are needed to contrive the data which a free-market produces on its own. (See Ron Paul, “Blame the Fed for the Financial Crisis”, the Wall Street Journal, 20 October 2011, http://online.wsj.com/article/SB10001424052970204346104576637290931614006.html; Henry Hazlitt, introduction to Time Will Run Back, http://mises.org/daily/2457.)

So in place of all this government accounting and converting, we could have a much simpler standard: the cost of powering a vehicle! After all, the cost of a fuel already accounts for mining the fuel, processing and refining it, transporting it, etc. etc. Everything the government is trying to calculate here, prices also reflect, assuming there is no subsidization or price-fixing.

We cannot use the dollar, however, because it inflates independently of the value of commodities per se (due to the Federal Reserve; inflation is when the value of goods stays the same but the dollar itself loses value). So I have a new standard: miles per gold-gram. Or, in case gold inflates, how about miles per (1/4 gold, 1/4 silver, 1/4 platinum, 1/4 palladium)-gram? Or how about miles per (a certain given year’s dollar, say the 1913 dollar)?

The point is, we should evaluate vehicles based on the cost it takes to fuel them. The price includes everything we otherwise need a team of scientists and accountants to calculate, and the price itself reflects the total cost of everything necessary.

Warren, excellent. Just like the article about MPGe last year. May I ask, why didn’t they simply create a kW/mile sticker? Why try to equate electricity to gasoline? Will you purchase gasoline-e, or a kW? Plus, I’d know how much a kW cost. So…why not kW/mile? This is of course based on the premise that a “charging station” will use some normal rate (kW/$$) and not something else (carbon credit/Wall Street fat cat).

I agree with the article on many grounds. 1. Tax subsidies are essentially allowing out of touch politicians to decide what products will be available rather than individual consumers.

2. This car is essentially only for the wealthy right now.

3. The EPA’s conversion is completely bogus. Any power systems engineer knows that 2/3 of the energy in fossil fuels is lost in the process of converting it to electricity.

The calculation you chose has at its root a major flaw. Not all electricity is created equal. If all electricity where generated using oil, then your calculation stands, however that is not the case.

Less than 1% of our electricity is generated in this way, so that calculation only applies to 1% of the electricity going into the vehicle. The other 99% comes from different sources.

If the point of having an electric vehicle is to reduce carbon emissions, then the calculations should take into account that the 20% of the electricity is generated from nuclear power plants which have 0 carbon emissions. In fact you would also have to conclude that someone using this vehicle in California would be causing the release of more carbon than someone using it in Illinois which has a higher share of its electricity coming from nuclear power.

Now that I’ve entertained the carbon concern, what is more important is our dependance on foreign oil.

If the point of the electric car is to get us energy independent, then it can be a tool to that end. If we were building more nuclear power plants in this country the issue of generating electricity from fossil fuels would be a non-issue.